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International trade and inclusive growth : a primer for busy policy analysts

  • Lederman, Daniel

This note provides two analytical frameworks for understanding the role of trade in promoting inclusive growth in developing economies. A working definition of inclusive growth focuses on long-term, sustained growth associated with productivity growth and employment opportunities for broad portions of households and firms within countries. International integration can promote inclusive growth when workers and firms are able to adjust to enter into growing economic activities and adopt technologies availed through international trade. The frameworks described in this note build on simple household and firm choice models, which require only basic knowledge of development economics. The discussion highlights how these frameworks can help analysts focus on research and policy questions related to the impacts of international trade across the distribution of households and firms within countries. It also discusses publicly available data sets that can be used to explore some aspects of inclusive growth. In addition, the note highlights important caveats that need to be acknowledged by analysts and discusses avenues for future research, which needs to be part and parcel of the inclusive growth agenda.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5886.

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Date of creation: 01 Nov 2011
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Handle: RePEc:wbk:wbrwps:5886
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  1. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: An Inverted-U Relationship," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 701-728, May.
  2. Irene Brambilla & Rafael Dix Carneiro & Daniel Lederman & Guido Porto, 2010. "Skills, Exports, and the Wages of Seven Million Latin American Workers," NBER Working Papers 15996, National Bureau of Economic Research, Inc.
  3. Irene Brambilla & Daniel Lederman & Guido Porto, 2012. "Exports, Export Destinations, and Skills," American Economic Review, American Economic Association, vol. 102(7), pages 3406-38, December.
  4. Guido G. Porto, 2007. "Globalisation and Poverty in Latin America: Some Channels and Some Evidence," The World Economy, Wiley Blackwell, vol. 30(9), pages 1430-1456, 09.
  5. Ann Harrison & John McLaren & Margaret McMillan, 2011. "Recent Perspectives on Trade and Inequality," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 261-289, 09.
  6. Miet Maertens, 2011. "Supply Chains in Export Agriculture, Competition, and Poverty in Sub-Saharan Africa," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 38(4), pages 615-617, October.
  7. Guido G. Porto, 2003. "Using survey data to assess the distributional effects of trade policy," Policy Research Working Paper Series 3137, The World Bank.
  8. Wodon, Quentin & Tsimpo, Clarence & Backiny-Yetna, Prospere & Joseph, George & Adoho, Franck & Coulombe, Harold, 2008. "Potential impact of higher food prices on poverty : summary estimates for a dozen west and central African countries," Policy Research Working Paper Series 4745, The World Bank.
  9. Porto, Guido G., 2005. "Estimating household responses to trade reforms : net consumers and net producers in rural Mexico," Policy Research Working Paper Series 3695, The World Bank.
  10. Erhan Artu´┐Ż & Shubham Chaudhuri & John McLaren, 2010. "Trade Shocks and Labor Adjustment: A Structural Empirical Approach," American Economic Review, American Economic Association, vol. 100(3), pages 1008-45, June.
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